>
>Brown rejects US bid for Iraqi cash
>
>David Leigh
>Tuesday March 25, 2003
>The Guardian
>
>The chancellor of the exchequer, Gordon Brown, is unwilling to comply with a
>US demand that he should turn over £200m Iraqi assets frozen in Britain to
>an American-controlled account.
>
>Britain wants the UN to control the funds, which have been frozen since the
>first Gulf war began 12 years ago.
>
>The Treasury said yesterday that Mr Brown has been in talks with his US
>opposite number, the treasury secretary John Snow, and wanted the money to
>be "used for the benefit and welfare of the Iraqi people".
>
>Cash totalling more than £400m has been frozen in British bank accounts
>under UN resolutions since 1990.
>
>The British stance is that both in the UK and the Cayman Islands, which have
>also been the subject of a US demand, there is no legal authority to hand
>the cash over to the US.
>
>The British government is still owed more than £1bn for defaults on credit
>sales to Iraq backed by the export credit guarantee department on the orders
>of the then Conservative government.
>
>The US government has ordered 17 banks in the US to hand over $1.7bn in
>frozen Iraqi government money, saying it will use it for humanitarian
>purposes. They include both US banks such as Citigroup and Bank of America
>to American subsidiaries of foreign banks, such as Deutsche Bank, the Arab
>Banking Corporation and the Commercial Bank of Kuwait.
>
>The cash is to be transferred to a new account at the Federal Reserve Bank
>of New York.
>
>The US asked eight countries to seize $600mn (£380m) in frozen Iraqi assets
>and turn it over to the American fund.
>
>US officials say the offshore Caribbean tax havens of the Bahamas and the
>Cayman Islands hold sizeable deposits. The Bahamas, whose administration
>remained silent last night, are independent and not under British control.
>
>White House officials have threatened to prevent foreign banks doing
>business in the US if they refused to turn over Iraqi government money and
>what they called "blood money" belonging to President Saddam or his
>associates.
>
>Saddam Hussein is alleged to have spirited away more than $6bn for his own
>benefit.
>
>The Swiss bank UBS said yesterday that it would hand over some money in
>blocked accounts at its US branches.
>
>"The funds stem from payments of US oil companies to Iraqi ones for
>deliveries ahead of the implementation of sanctions against Iraq in 1990,"
>its spokesman Serge Steiner said.
>
>But officials in Switzerland said they would be unable to hand over $364m
>from Swiss accounts without a security council resolution.